Stock Repurchases: “We Can’t Think Of Anything Better To Do With Your Money”

The Wall Street Journal took aim yesterday at stock repurchases and dividend payments, citing a commissioned study that concluded: “companies in the S&P 500 index sharply increased their spending on dividends and buybacks to a median 36% of operating cash flow in 2013, from 18% in 2003.  Over that same decade, those companies cut spending on plants

Does Mandated Unbundling Deprive Stockholders The Right To Vote On The Whole?

A forthcoming academic paper looks for bundling in more than 1,500 management proposals between 2003 and 2012.  Bundling occurs when multiple matters are combined into a single proposal.  The authors, James Cox, Fabrizio Ferri, Colleen Honigsberg, and Randall Thomas, conclude that bundling occurs far more frequently than had been suggested by prior studies.  They recommend that the Securities

SB 75 May Prove To Be Delaware’s Seven Sisters

A century ago, New Jersey was the state in which to incorporate.  Long before former Iraqi President popularized the expression “Mother of Battles” (“Um El-Ma’arek“), the famed legal scholar Adolph A. Berle, Jr. bestowed the title of “mother of all corporations” on the State of New Jersey.  Berle, Historical Inheritance of American Corporations, Lecture given before The

Will Delaware’s Fee-Shifting Bylaw Bill Be A Boon To Other States?

Late last week, Senate Bill 75 was introduced in Delaware.  This bill is in part a reaction to the Delaware Supreme Court’s holding in ATP Tour, Inc. v. Deutscher Tennis Bund, 91 A.3d 554 (Del. 2014) upholding as facially valid a bylaw imposing liability for certain legal fees of the nonstock corporation on certain members who

Dismissal Of Involuntary Dissolution Action Pulls The Plug On Corporate Buy Out

Sometimes, shareholders are divided on whether a corporation should live or die.  In these cases, the California Corporations Code provides an option that allows for the continued existence of a corporation.  In any action for involuntary dissolution, or in any proceeding for voluntary dissolution initiated by the vote of shareholders representing only 50% of the voting

What Exactly Does The SEC Mean By “Permit”?

The Securities and Exchange Commission has proposed rule amendments to implement Section 955 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L.  No. 111-203, 124 Stat. 1900 (July 21, 2010).  Among other things, the SEC is proposing to add a new paragraph (i) to Item 407 of Regulation S-K.  This new paragraph would require

Email Notice Without Consent Is Not Notice

IMG_4273

The California General Corporation Law unequivocally authorizes the giving of notice of stockholder meetings by electronic transmission.  Section 601(b) provides “Notice of a shareholders’ meeting or any report shall be given personally, by electronic transmission by the corporation . . .”.  The statute further provides that notice is deemed to have been given when sent

Do Your Bylaws Make Obtaining Waivers Of Notice More Onerous?

Yesterday’s post concerned waivers of notice of shareholders’ meetings under Section 602 of the California Corporations Code.  Although not required to do so, corporate bylaws often parrot the statute.  One popular guidebook, for example, includes the following sample language concerning waivers of notice: The transactions of any meeting of shareholders, either annual or special, however

Why Your Shareholder Meeting Waivers Of Notice May Not Be Up To Snuff

Like other states, California generally requires that whenever shareholders are required or permitted to take action at a meeting, notice of that meeting must be given to the shareholders entitled to vote.  Cal. Corp. Code § 601(a)  However, if notice isn’t given as required, all may not be lost.  Section 601(e) of the Corporations Code provides